Activity Vouchers: &quot;Redirect, Not Refund&quot;

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The problem with the current Special Fee system is that student input is limited to an annual yes-or-no vote on each student group for a set amount of funding. For example, we have no way to express that Green Living Council deserves far more than $9,800, and that The Chappie deserves less than $22,000.

In a January op-ed in The Stanford Review, I proposed an improved student activities funding scheme called Activity Vouchers where each student would decide how to allocate their activity fee to student groups. Each quarter, students could go online and dole out their (roughly) $150 fee to the student groups they value. Based on all of the valuable feedback I’ve gotten, there’s now much more to say about Activity Vouchers.

The best way to think about Activity Vouchers is that it’s like getting a gift card to your favorite store. You can get exactly what you like, and so can everybody else. Enough people like similar things that we all get cool things, and yet we’re different enough so that there’s a wide variety of things available. Special Fees, on the other hand, is like having manufacturers lobby Congress to put a list of things on the ballot. If a majority votes yes on something, everyone has to buy that thing; otherwise, nobody can get that thing. Even if the things you want get approved, you aren’t necessarily satisfied: maybe you wanted five of them, but voters approved only one. This is a miserable system.

By this analogy, it’s clear that Special Fees is inefficient in terms of wasted money: people are forced to pay for groups they don’t like. I’m not bothered much by this, since a few dollars to let classmates pursue their interests is no waste in a community like ours. The really bad kind of inefficiency is when a sizable minority of students wants more of something than the median voter wants, and they’re unable to get it.

For example, suppose 49% of student voters think Stanford Jazz Orchestra deserves $30,000, but 51% think they only deserve $5,000. If each student made individual allocations, Jazz Orchestra would get $17,250, but under Special Fees it only gets $5,000. With Activity Vouchers, money flows to groups who can attract enthusiastic supporters. Under Special Fees, money goes to groups that master the maze of ASSU rules and that flyer and spam to sway the median voter.

Now, here’s why Activity Vouchers wouldn’t be a radical change.

Redirect, not refund

We can implement Activity Vouchers as an incremental improvement to the current system in a way that retains most of the benefits and helps solve the refund problem. Keep everything the same, except for one thing: instead of just letting students refund Special Fees, also give them the option to redirect their fees to other student groups they deem worthier. This would be like having Activity Vouchers but with the default allocation set to what voters passed on the ballot.

Students with strong objections to funding certain student groups (like Catholics and SHPRC), who are the main reason why we must allow refunds, would be satisfied by redirecting that money to another group. So by implementing “redirect, not refund,” we could legitimately tighten up the refund process (e.g., by requiring students to request them in person) and immediately get back much of the 15% currently lost to refunds. (Thanks to Adam Ting for this idea.)

Matching funds

After a couple years of keeping the current system but allowing students to redirect fees, we’d be able to discontinue Special Fees and rely entirely on Activity Vouchers. As long as about 20% of students choose allocations each quarter, we could use the average of all their choices to set the default allocations for the other 80% of students who don’t make allocations. (In last year’s election, the majority of groups that passed were approved by less than 20% of the student body, so relying on 20% to set allocations is not crazy.)

Now, say that a student chose to give $50 (about a third of her quarterly fee) to the Black Student Union. Because that decision factors into the default allocation for the other 80% of students, the $50 contribution is effectively matched 4-to-1 and becomes a $250 contribution. The matching factor decreases with greater participation, of course. Even if 50% of students participate, a 1-to-1 match still means that 50 students (less than 1% of all undergrads) giving $50 per quarter to a student group would yield $15,000 per year.

*Author’s Note: Thanks also to Stewart Macgregor-Dennis, Adam Adler, Otis Reid, and Kevin Baumgartner for their feedback on Activity Vouchers.*Keep the feedback coming!